Attorney General Lockyer Files First Lawsuit Against Telemarketer for Calling Phone Numbers on the National Do Not Call Registry

Thursday, November 6, 2003

Contact: (415) 703-5837, agpressoffice@doj.ca.gov

(SACRAMENTO) – Attorney General Bill Lockyer today filed a civil complaint against a California company that placed commercial phone calls to California consumers who had registered their phone numbers on the national Do Not Call list. The lawsuit is believed to be the first filed in the country against a company for phoning numbers on the Federal Trade Commission's (FTC) registry, which went into effect last month.

"This lawsuit should put all telemarketers on notice to get a copy of the Do Not Call registry and take the law seriously," Lockyer said. "Millions of Californians registered their phone numbers on the national list to reclaim their privacy and family lives from telemarketers. If you're on the FTC's registry and still getting calls, report it so we can continue to aggressively enforce the law to protect Californians."

Filed in U.S. District Court in San Francisco, the complaint alleges that American Home Craft, Inc., a home improvement company and licensed contractor, violated the federal Telephone Consumer Protection Act (TCPA) by placing telemarketing calls to California phone numbers listed on the FTC's Do Not Call Registry. The complaint also alleges American Home Craft violated state law by engaging in unfair competition.

Based in Hayward, with offices in Sacramento, San Diego and Irvine, the company is alleged to have placed illegal phone calls to dozens of California consumers. The Attorney General's Office accesses the FTC list daily to monitor complaints filed by California consumers and identify companies that are violating the Do Not Call laws. Dozens of complaints were filed by Californians in 12 area codes near the company's four offices.

The investigation by the Attorney General's Office also revealed American Home Craft never attempted to purchase the Do Not Call registry. Since September 1, the registry has been available for businesses to purchase so that they can remove from their internal marketing lists all phone numbers that are registered on the national list. Because businesses were given 30 days to scrub their lists of registered phone numbers, the federal law was scheduled to go into effect on October 1. However, a court order temporarily shut the program down. As a result, the Attorney General's Office and the FTC are focusing on violations that were committed on or after October 17.

As president of the National Association of Attorneys General, Lockyer took the lead in filing a friend of the court brief on behalf of 46 states, the District of Columbia and Puerto Rico defending the federal statute in the two challenges brought by telemarketers. The cases have been joined, and oral arguments are expected later this month in federal court in Tulsa, Okla.

Under the TCPA, the court may award up $500 for each violation, and up to $1,500 per violation if the act was willful. California's unfair competition statute provides for civil penalties of up to $2,500 per violation. The actual amount of penalties obtained against American Home Craft will depend on the number of violations proven at trial, but the Attorney General's complaint asks the court for at least $100,000. When California's Do Not Call law goes into effect January 1, 2004, the Attorney General will be able to file lawsuits under the state statute and obtain penalties of up to $11,000 per violation. The suit also asks for a permanent injunction, requiring the company to abide by the law.

While most telemarketers are covered by the registry, there are exceptions for charities, political groups and, under the pending state law, small businesses with five employees or less. However, even exempt organizations are banned from calling phone numbers listed on the national Do Not Call registry if they use a professional telemarketer to sell goods or services on their behalf.

Federal law also, and the state law will, allow a company that has an "established business relationship" to continue calling a customer for up to18 months after the customer's last purchase payment or delivery – even if the customer's number is on the national Do Not Call registry. Companies to which a consumer has made an inquiry or submitted an application are permitted to call for three months. However, if a consumer asks a company to not call, it must honor that request even if it has an established business relationship with the consumer

Telephone numbers placed on the national Do Not Call registry will stay on the list for five years unless a consumer changes numbers or removes them from the list. The federal law requires businesses to check the list every 90 days and remove from their marketing lists all new numbers that have been added.

Lockyer said that although there are still companies violating the Do Not Call law, consumers who have registered their numbers are reporting a dramatic drop in the number of unwanted phone calls. He urged Californians who wish to block unsolicited commercial calls to register their numbers by visiting the FTC's website at www.donotcall.gov or calling 1-888-382-1222.